Nearly 1 in 3 American's aren't saving any money

[rhinefire]

Increasingly, working Americans are broke. Rents are going up and wages aren't. Medical care is getting more and more expensive. Education has become astoundingly expensive and anything better than a fast food job requires a college degree. Many young people are trapped in a cycle of unpaid internships.

We're not saving any money because we don't have any money to save. This is what you Reaganomics people wanted. Supply has all the power and the rest of us are scrambling to pick up the trickles. Aren't you glad you got your way?

Ridiculous!!!! The only reason people don't have money in their silver years is they did not save and did not invest. Any idiot will know that. One can work one, two or three jobs whatever it takes. One has to live on a BUDGET, a word long forgotten. Reaganomics, what a joke.

 

[Paschendale]

Ridiculous!!!! The only reason people don't have money in their silver years is they did not save and did not invest. Any idiot will know that. One can work one, two or three jobs whatever it takes. One has to live on a BUDGET, a word long forgotten. Reaganomics, what a joke.

Spoken like someone who has never had to wonder if they would be able to pay their rent. That's the "I got mine" mentality right there.

 

[minnie616]

Rule of thumb.
Up to one third of income to live on.
Up to one third for income taxes.
The final amount for charity ,investment and savings.

 

[iguanaman]

Perhaps this has something to do with the lack of savings. No money to save.

 

[Kushinator]

Because it encourages us to get a loan we can't afford for a new truck we don't need.

Speak for yourself. If a person can get a loan they can't afford, that is a clear signal of underwriting failure with respect to risk. Lenders are supposed to be professionals; and giving loans to people who cannot afford them is bad business. Need is an arbitrary term. We don't "need" to be spending time discussing/arguing about politics on the internet.

 

[RGacky3]

Increasingly, working Americans are broke. Rents are going up and wages aren't. Medical care is getting more and more expensive. Education has become astoundingly expensive and anything better than a fast food job requires a college degree. Many young people are trapped in a cycle of unpaid internships.

We're not saving any money because we don't have any money to save. This is what you Reaganomics people wanted. Supply has all the power and the rest of us are scrambling to pick up the trickles. Aren't you glad you got your way?

This is the one answer that actually matters .... People did'nt suddenly get irresponsible ... the economic conditions changed.

 

[molten_dragon]

Brother, ain't that the truth!!

In fact, based on what I'm looking at every day, I'd say it's worse than 1:3.

I'm looking at couples making low 6 figures that don't even save 1/10 of their income and individuals making $70k who are putting maybe $2k into their 401(k). Then you've got the ones that are going to get a state or federal pension that don't save anything else.

All day long I talk to people who are contemplating retirement and I ask what they have put away and it's normally less than $50k.

The flip side is that I've got a few who have saved and they're often making more in retirement than they were while working.

My wife and I are the only people our age (late 20s) we know who are saving for retirement. The second we got our student loans paid off we began maxing out our 401k matching at work. We save more (for other things though) in addition to that.

 

[DA60]

Most Keynesians, IMO, love this...they hate savings.

 

[Geoist]

I believe in fiscal responsibility, both personally and on a government level. And while I love my laptop and car, I abhor the excess in materialism that we see in society (I still refuse to get a smart phone and got rid of my tv two years ago). With that said, I think it is too simplistic to say people today simply do not know how to handle money. It was much easier to save when the costs of living were much much lower than they are today.

 

[imagep]

...

The upside? It seems that people are de-leveraging



So perhaps we simply stopped socking money into the rainy day fund, and started using it to pay down debt instead. That would be a wise allocation of funds.

...buuuuut.... I'm sort of worried we are just blowing it instead.[/FONT][/COLOR]

It seems to me that paying down debt is pretty much the same as savings. thats the point that I am now. It will most likely take me 9 more years to pay off all my my debt, personal and business, at that point I should have a significant net worth in the form of "stuff", and I should be able to start saving/investing actual cash.

Anyhow, I think that if just 1 out of three people aren't saving, thats pretty good. I figure that 1 out of three is either already retired, or has children in their household or is a college student.

As a parent, I have always struggled with the moral delima of whether to benefit my kid, or whether to save and invest. I decided to spend the money on my kid (private music/sports lessons, travel vacations, safe home and transportation, etc). I don't regret doing that.

 

[imagep]

I fail to see where a consumerist economy automatically removes personal responsibility and accountability from the equation?

Most developed economies are "consumerist" economies. That doesn't remove personal responsibility of course, but if everyone lived like a miser, our economy would be in very bad shape, and most people would be FORCED to live like a miser because they would be living on welfare and unemployment.

It's called the "paradox of thrift".

 

[theaterofdreams]

How exactly does one save money when you're barely breaking even?

 

[imagep]

The sarcasm is that we have a society that has public policies that disincentivizes savings and investment while reducing the costs of going into debt. Naturally people should save in certain tax deferred vehicles because of the tax deferrment, but just taking money and sticking it into a savings account? That's a loser on its face, the interest doesn't match the inflation.

thats partly because our economy doesn't have a need for pooled capital. the federal reserve can provide banks with ample capital.

the other important thing is that debt is typically generated when one person has more money than they need, and someone else has less than they need. Debt is probably the best metric to measure maldistribution of income and wealth. the more debt that exists, the more f^¢%ed up our economic distribution system is. It's a symptom, not a cause.

 

[imagep]

Because it encourages us to get a loan we can't afford for a new truck we don't need.

People don't need new trucks? You obviously don't live in the south, you could be lynched for saying such.

 

[herenow1]

My husband is the big spender in our marriage. I've tried saving numerous times but I've quit trying!! At least we aren't in debt and all of our bills get paid!

 

[imagep]

More money has flowed through the hands of the American Baby Boomers than any generation in human history. And, by and large, they blew all of it.

I would suggest that they used it to create a record amount of wealth. Just look around you, you don't see any buildings/houses/technology that were built or developed by the baby boomer generation?

 

[imagep]

1. If you aren't retired, you should be saving.
2. The problem is, we are saving pitifully small amounts. Luther's not wrong when he says he meets lots of folks with about $50K in retirement accounts - the Boomers are hitting retirement savings with pretty much nothing socked away compared to what they need.

On an individual level, yes. On a macro level, we are "saving" more than ever. Money is just a temporary store of value, and tokens which we use to facilitate trade with.

Real wealth is things like long term goods, education, and infrastructure. A hundred years ago we didn't have the road system that we have today, we didn't have utilities, we didn't have much of all in the terms of real wealth. Look around you, almost everything that we have has been created in the last 50 years. thats REAL wealth, and we have created and saved a great deal of it.

 

[imagep]

45% of all American households with people still in their working years have saved nothing at all. Among those ages 50-74 75% have less than $28,000 put away. Among the most prepared savings average only $140,000...

Does that include the value of their homes, autos and chattle?

 

[imagep]

Ridiculous!!!! The only reason people don't have money in their silver years is they did not save and did not invest. Any idiot will know that. One can work one, two or three jobs whatever it takes. One has to live on a BUDGET, a word long forgotten. Reaganomics, what a joke.

On an individual level, thats fine, but it's not a macroeconomic solution. There are not enough jobs for everyone to work three jobs. There are not even enough jobs for everyone to have one.

 

[imagep]

How exactly does one save money when you're barely breaking even?

Apparently conservatives think that everyone should live like a miser, and stop buying stuff.

What I want to know is exactly how does one save money, when he doesn't have a job (because everyone has stopped buying stuff)?

 

[cpwill]

I would suggest that they used it to create a record amount of wealth. Just look around you, you don't see any buildings/houses/technology that were built or developed by the baby boomer generation?

Yeah, and I see a lot of people who have put vacations and brand new vehicles that they didn't need on credit, too. Had they saved and paid cash? Consumption deferred is still consumption occurred. Meanwhile, that money (had they saved it) still would have been utilized - because banks are in the business of doing so. It would have provided short term cash for businesses, or more and better housing in the long run, housing that wasn't a bubble. If the baby boomers were creating wealth, then they would be retiring with higher net worths' than they are. They appear to have instead spent on putting financial backing to the "if it feels good, do it" philosophy.

 

[cpwill]

Apparently conservatives think that everyone should live like a miser, and stop buying stuff.

:shrug: if you make little.

What I want to know is exactly how does one save money, when he doesn't have a job (because everyone has stopped buying stuff)?

Demand side economics puts the cart before the horse. What I want to know is how does one save money when one doesn't have a job because we tried to "stimulate" the economy by taking money out of the hands of businesses and investors, and putting it into the hands of politicians.

 

[cpwill]

On an individual level, yes. On a macro level, we are "saving" more than ever. Money is just a temporary store of value, and tokens which we use to facilitate trade with.

Real wealth is things like long term goods, education, and infrastructure. A hundred years ago we didn't have the road system that we have today, we didn't have utilities, we didn't have much of all in the terms of real wealth. Look around you, almost everything that we have has been created in the last 50 years. thats REAL wealth, and we have created and saved a great deal of it.

No - Savings is deferred consumption. You appear to have "savings" confused with "having bought a bunch of crap".

 

[austrianecon]

It is rather presumptuous to say people are saving less because of materialism.

I'll buy this line when people aren't buying $150 shoes every 6 months.

 

[cpwill]

People don't need new trucks? You obviously don't live in the south, you could be lynched for saying such.

I live in Alabama, and in the Marine Corps, a brand new F350 with big tires was pretty much a requirement for a Staff Sergeant. But no, people don't need new trucks. You know how you are trying to picture spending money as a form of savings? Well buying a new truck is "saving" wealth in an asset that is going to depreciate by 70% over the next four years.